--- title: Student loan repayments are back and more confusing than ever - The Hustle description: The return of federal student loan payments brings borrower stress and economic uncertainty. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/1645811006-httpsthdaily.s3.us-west-1.amazonaws.comfinal_size-StudentLoans_20230831230545.webp --- # Student loan repayments are back and more confusing than ever ![Sara Friedman](https://53.fs1.hubspotusercontent-na1.net/hubfs/53/assets/hubspot.com/web-team/WBZ/HubSpot%20Media/Blog%202021/Images/Nav/Optimized/TheHustle_Icon_Dark.svg) [Sara Friedman](https://hs-sbup.thehustle.co/author/sara-friedman) [Sara Friedman Twitter profile ](https://twitter.com/sarafriedmannn) Published: September 01, 2023 Updated: October 11, 2023 After a 42-month freeze, interest on federal student loans will begin accruing again today following [Congress’](https://fivethirtyeight.com/features/how-restarting-student-loan-payments-could-change-millions-of-lives-and-the-economy/) vote in May. ![The back of a man’s body who is wearing a graduation cap and gown with embroidered letters spelling “debt” on the cap](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/1645811006-httpsthdaily.s3.us-west-1.amazonaws.comfinal_size-StudentLoans_20230831230545.webp?width=595&height=400&name=1645811006-httpsthdaily.s3.us-west-1.amazonaws.comfinal_size-StudentLoans_20230831230545.webp) The pause, which was instituted in March 2020 as a form of pandemic relief and has been extended 8x, affects [~44m](https://www.cbsnews.com/news/student-loan-repayment-when-does-it-restart-interest-options/) borrowers who owe an average of ~$38k. When the pandemic hit, the Department of Education [automatically](https://studentaid.gov/announcements-events/covid-19/payment-pause-zero-interest) paused loan payments and suspended interest, saving borrowers a combined [$5B](https://money.com/student-loan-interest-sept-1/) per month. Along with resuming interest accrual today, payments are set to restart in October. (The exact date will vary by borrower.) **The change has left many in the lurch** - Millions of borrowers graduated during the pandemic, making this their first experience with repayments. - [Changes](https://www.ed.gov/news/press-releases/biden-harris-administration-provide-804000-borrowers-39-billion-automatic-loan-forgiveness-result-fixes-income-driven-repayment-plans) to repayment plans from the Biden administration, while [helpful](https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/22/fact-sheet-the-biden-harris-administration-launches-the-save-plan-the-most-affordable-student-loan-repayment-plan-ever-to-lower-monthly-payments-for-millions-of-borrowers/) for some borrowers, have added complexity to the process. - Four in [10](https://www.wsj.com/personal-finance/student-loans-are-emerging-from-deep-freeze-and-borrowers-are-confused-322e184f) borrowers’ loans were transferred to a new service during the pause, and many are receiving payment schedules via email from providers they’re unfamiliar with. The biggest issue: Only [half](https://money.usnews.com/loans/student-loans/articles/2023-student-loan-repayment-survey) of borrowers know how much they’ll owe when payments start back up. The confusion has led to long [wait](https://www.usatoday.com/story/money/personalfinance/2023/04/13/long-wait-times-when-student-loan-payment-starts/11657454002/) times and dropped calls for many when trying to reach loan representatives. **This is no pocket change** Student loan debt is the second-biggest consumer debt category (following mortgages) and it’s approaching [$1.8T](https://fivethirtyeight.com/features/how-restarting-student-loan-payments-could-change-millions-of-lives-and-the-economy/), of which [93%](https://www.forbes.com/sites/dereksaul/2023/08/29/student-loan-interest-starts-accruing-again-friday--heres-what-to-know/?sh=2a8571110c9c) is federal debt. Plus, inflation has driven up housing and food costs since 2020, making the average debt payment of [~$500](https://educationdata.org/average-student-loan-payment#:~:text=The%20average%20monthly%20student%20loan,average%20salaries%20among%20college%20graduates.) an even bigger burden than before. **This has real economic repercussions** - Student debt accounts for an estimated [20%](https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf) of the decline in homeownership for young adults. - Borrowers contribute [6%](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/student-loan-debt-pov.pdf) less, on average, to retirement savings than those without student debt. - For every [1%](https://educationdata.org/student-loan-debt-economic-impact#:~:text=Student%20Debt%20Reduces%20Spending,by%20as%20much%20as%203.7%25.) increase of a consumer’s debt-to-income ratio, their consumption declines by up to 3.7%. Some experts predict that consumer spending could drop [$27B](https://info.oxfordeconomics.com/l/1022713/2023-07-20/9gw7/1022713/1689875907bDofpoL1/US_Student_loan_relief_is_ending_whats_next.pdf?utm_campaign=PR-NAM&utm_medium=email&_hsmi=267139978&_hsenc=p2ANqtz--w1VezofV3lnrOixFceyqqVvS9MoF3uJhDSQbX6Syu7g7-YxsvonejztWKI36O7T5kACV6rMfLuGHoQfOZ2w50Di3mRQ&utm_content=267139978&utm_source=hs_email) per quarter, and that certain [industries](https://fortune.com/2023/07/04/bars-restaurants-retailers-brace-hit-student-loan-payments-restart-deutsche-bank/) — such as ecommerce, retail, and hospitality — will be especially hard-hit. **The silver lining?** More companies are [offering](https://www.bloomberg.com/news/articles/2023-08-29/student-loan-forgiveness-us-companies-help-debt-burdened-grads?sref=3Ac2yX40) student loan repayment benefits to attract top talent. Topics: [Education](https://hs-sbup.thehustle.co/tag/education) ## Follow us on social media prev next - ![Looking for an edge in attracting talent? Give ’em a reasonable place to live](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/1955417428-httpsthdaily.s3.us-west-1.amazonaws.comfinal_size-housing_20230816223900.webp) ### Looking for an edge in attracting talent? 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